“I have always recognized that the object of business is to make money in an honorable manner. I have endeavored to remember that the object of life is to do good.” – Peter Cooper; Inventor, Manufacturer, and Philanthropist.
Business ethics is one of the most debated topics of our times. The difference between right and wrong business practices and their outcome is crucial for economic development. Business ethics are moral values and principles that determine our conduct in the business world. It refers to the commercial activities, either with other businesses or with a single customer.
They can be applied to all aspects of business; from concept of an idea to its sale. Business uses society for its resources and functioning, thereby obligating it to the welfare of society. While the objective of all business is to make profits, it should contribute to the interest of society by ensuring fair practices. However, greed has led the present business scenario towards unethical business practices, legal complications, and general mistrust.
In the article “Business Ethics” by Khushnuma Irani writes: It’s very important to understand that each person has their own impression of ethics. What may be wrong for one person may be right for another and vice versa. From a businessman’s point of view, it is important to gauge a person’s understanding of ethics and their sense of ‘what is ethical’ so as to be compatible with your business standards. The basic frameworks for business ethics or ‘code of conduct’ can be exemplified by:
- Criminal behavior and legal framework – every business needs to have a code of ethics pertaining to criminal behavior and legal issues.
- Human values and personal behavior – every business needs to have an ethical framework or policy for human values and behavior.
- Corporate and business ethics – ethical policies for business and actions need to be in compliance with legal framework and standards.
There is much talk about right and wrong, acceptable and unacceptable, principles and protocol; all this pertains to ethics. But, at the end of it all, remember that ethics have a lot to do with perception, which can be modified but never completely changed. Ethics is an important part of life, and running a successful business is no exception. For a business to prosper and maintain its wealth, it must be founded and sustained on strong ethical principles…
In the article “Ethics Important in Business” by Manali Oak writes: Trustworthiness of a business, its customer service, its customer care, its way of dealing with customers, and its need to retain its customer base, is a part of business ethics. Ethics is a far-reaching concept and goes beyond the idea of just making money legally.
Ethics is about earning long-lasting relationships in business and an integral part of running a business, hence ethical values accompany business by default. Success without a foundation of strong ethics is bound to be short-lived. A business cannot continue to prosper without an ethical base. A few successes can be coincidences or flukes but persistent success can only be a result of a strong foundation of ethics…
The use of company resources for personal gain and taking an undue advantage of business resources is completely unethical. A thoughtful and a careful utilization of company resources is a part of business ethics. A vigilant and prudent use of resources is an essential component of ethics in business. Accepting bribes, pleasing the so-called ‘important’ clients, favoring some customers while being unfair towards others is against business ethics. The primary aim of business is not just to maximize profits, but to contribute to the needs of society and work towards benefiting the masses…
In the article “Why Management Needs a Code of Conduct” by Ángel Cabrera writes: The financial meltdown of 2008 and the ensuing global economic crisis have ignited a vigorous debate on the responsibilities of businesses and those who manage them. The question raised is whether managers ought to be required to adopt the equivalent of a “Hippocratic oath (business code of conduct)”.
The pressure is indeed mounting, as public trust towards business leaders has hit historically low levels and questions about business ethics have become a central topic in the media. Even the leaders of the “Group of 20 Nations” singled out “reckless behavior and a lack of responsibility” among the root causes of the crisis.
The idea that business managers should be held to the same standards of professional conduct that are expected of other professions is at least as old as business schools. Yet, practitioners and academics have stubbornly refused to explicitly accept any other responsibility for managers other than maximizing shareholder returns or any code of conduct beyond simply obeying the law.
However, as the world began to reexamine the causes leading up to the financial crisis, the finger of blame turned, in part, to business schools who were accused of perpetuating a narrow view of value creation and managerial responsibility. And, as influential thought leaders such as “World Economic Forum” founder Klaus Schwab and Harvard professors Rakesh Khurana and Nitin Nohria who continue to argue for the need to establish a “Hippocratic oath” for business – a business code of conduct…
What is misleading or deceptive conduct? Legendary entrepreneur Warren Buffet put it this way: “Trust is like the air we breathe. When it’s present, nobody really notices. But when it’s absent, everybody notices: Manage your business on ethical principles”. Put the right things in place to build an ethical corporate culture: Mission, values, clear and accessible policies and processes, corporate citizenship and philanthropy.
The first step is to be a model of ethical behavior yourself, “If your employees see you cutting corners and consistently working in gray areas, then they are probably going to do the same thing regardless of what your code of ethics says. It’s a monkey-see, monkey-do world we live in, and like it or not, if you’re the big monkey everyone looks up to you in your company.” Begin with a firm statement of convictions and principles — these are the cornerstones of how organizations should operate in present and into the future.
In the article “Truth, Lies & Unicorns: Cost of Dishonesty in Business” by Charles Green and Andrea Howe write: What is lying? On a conversational level, we take “lying” to mean speaking an untruth, overtly saying something that is not the case. Webster’s first definition is, “to make an untrue statement with intent to deceive.” “To lie” is an active verb, with a connotation of intent.
But Webster’s second definition is far broader: “to create a false or misleading impression.” That definition includes lies of omission; it even extends beyond speech. It’s that second definition we’d like to explore. By that definition, business advisors (or, for that matter, most people) who don’t lie are like unicorns: not inconceivable, but pretty infrequent. In the same sense, ‘Diogenes (Diogenes the Cynic, a Greek philosopher)’ said; “society is corrupt and he never found an honest man”. Yet we say trust is critical to develop meaningful customer-advisor relationships. How do we reconcile these two “truths”?
John F. Lawhon in his book “The Selling Bible” wrote: “Enthusiasm is the greatest secret in selling.” How often have you read or heard of a firm or individual that has been caught in controversy for some form of unethical sales conduct? What is the current scope or magnitude of the ethics problem in the sales profession?
Robert F. Kelleher described the severity of the problem in his book “Marketing and Sales in the Computer Age” when he wrote: “Within the vast sea of opportunity for any business or person to get in trouble lurks the sales function. Probably no other profession is so cursed with the potential to destroy a company or individual’s career.” For another prospective: Review theories in Dave Colcord’s “Developing Sales Technique and Sales Personality”….
In the article “Ethics in Business: Focusing Values for Success” by Mark S. Putnam writes: Ethics in business is fundamentally about fair play. We call someone who plays by the rules, “ethical.” However, we need to face the reality of moral absolutes and reject the ethical relativism that creeps in to undermine them. Imagine ethics in the business world where ethical codes are devoid of moral absolutes. What remains, are only good intentions, hollow expectations, and nice sounding ideas.
There must be a balance between the ethical expectations of the employer and the character of the individual. When both have their ethical foundations built on absolute principles, they are in sync and they will counter the problem of ethical relativism. Good business ethics in the workplace are a matter of getting back to business ethics basics… Be convinced that there are moral absolutes and close the door on ethical relativism. Believe it or not, there is a place for ethics in the workplace, but we’ve been too busy to notice…
More often than anything, business ethics is a matter of dealing with dilemmas that have no clear indication of what is right or wrong. The moral mazes of management are the numerous ethical problems that managers must deal with on a daily basis. Such problems are potential conflicts of interest, mismanagement of contracts and agreements, wrongful use of resources, and so on.
Many businesses do have ethics codes to follow: “Ethical codes are standards of conduct or rules of behavior adopted by institutions, organizations or professions.” A moral or ethical dilemma is “a situation in which a person can choose between at least two different courses of action that appear to be equally justified (or unjustified) from an ethical or moral point of view”. Different choices may be supported by different principles, and the conflicts of these principles give rise to the dilemma. Businesses are often confronted with ethical dilemmas, but the true ethical test is how these dilemmas are resolved…
We need to come to terms with the fact that management of business is indeed a true profession. A profession that, like the most honorable of professions, exists to improve the lives of our fellow human beings through the creative application of technical knowledge and personal skill to complex problems. It is time for the business community and business schools worldwide to step up and work collaboratively to develop and adopt a ‘code of conduct’ that will help restore the management profession to the respect and recognition it deserves.
A Buddhist religious principle says “Bahujana Hitaya, Bahujana Sukhaya”, which literally means “Of the greatest good, of the greatest number”. This is what business ethics must actually be all about: Making great strides in improving the prosperity of the business, but also being socially and ethically responsible to the world community at large…